Choosing the best tankless water heater for your home or business can be very difficult. You need to first establish what your maximum budget is while also considering whether you’d be better off opting for a gas or electric model.

While the initial startup cost is higher than with traditional water heaters, these devices bring a huge variety of benefits, some of which include having virtually instantaneous hot water whenever you want and the ability to save space thanks to their compact design.

Not only this, you’ll have a much higher quality product made with the latest technology and modern parts, meaning that your tankless water heater will last longer with less maintenance.

Last but not least, the best tankless water heaters are much more energy efficient thus allowing you to cut down your gas and electric bills every year while also having a more positive impact on the environment.

If you’ve decided that you’re in the market for a tankless water heater but don’t know which one is best for your individual needs, this buying guide is for you.

In it, we’ve reviewed five of the best tankless water heaters, both electric and gas, while also highlighting some features you should look out for when making your final decision as well as key reasons why you should pay attention when purchasing a tankless water heater.

So, without further ado, let’s get started.

Our Recommendations for the Best Tankless Water Heaters Today

Best Electric Tankless Water Heater

Winner: EcoSmart ECO 27 Electric Tankless Water Heater

If you’re looking for an electric tankless water heater that can be controlled remotely and is easy to use, then we recommend you check out the EcoSmart ECO 27 Electric Tankless Water Heater.

Designed by one of the most sustainable tankless water heater manufacturers in the world, the EcoSmart ECO 27 Electric Tankless Water Heater allows you to save up to 50% on your water heating bills.

Created in a space-saving design, this EcoSmart model is only 17 inches high by 17 inches wide with a 3.65-inch diameter. Plus, it only requires a ¾ of an inch NPT pipe fitting to install.

Designed to suit colder climates, the EcoSmart ECO 27 Electric Tankless Water Heater is bound to keep you warm all year round even if the temperature where you live drops below 45-degree Fahrenheit.

This EcoSmart model is to be used in more demanding water usage applications and comes with self-modulating flow sensor technology allowing it to regulate the amount of energy used to heat the hot water you need in your home or business.

Its modern design comes with a digital temperature gauge giving you visual access to the outlet water temperature setting. With it, in colder temperatures, you’ll be heating nearly 3 gallons of water per minute.

While this Ecosmart tankless water heater can be purchased in various sizes, the Eco 27 is by far the largest to come with the company’s Patented Self Modulating Technology.

Because of its ability to heat water in colder environments, it is the perfect model for any home or business in North and South America, as well as Canada.

Not only this, if you own a hot tub or jacuzzi, you’ll find that the EcoSmart ECO 27 Electric Tankless Water Heater can fill it up with the perfect temperature water in no time.

Thanks to its digital temperature control, you can set the temperature of your hot water in increments of 1 degree. The EcoSmart ECO 27 Electric Tankless Water Heater uses 3 9KW standard Emerson electric heating elements, all of which have brass tops to avoid electrolysis.

It comes with an automatic resettable thermostat and a copper heat exchanger. Above all, this EcoSmart model comes with a lifetime warranty and is UL and CSA certified. Plus, it only weighs a mere 11 pounds.

With 80% 4 and 5-star ratings and more than 1,700 reviews, we believe the EcoSmart ECO 27 Electric Tankless Water Heater is an exceptional product that is very reasonably priced at just over $371 per unit.

Runner Up: Bosch Tronic 3000 T 4-Gallon Electric Mini-Tank Water Heater

If the above EcoSmart model doesn’t quite meet your needs or is a bit too expensive then we recommend you check out the Bosch Tronic 3000 T 4-Gallon Electric Mini-Tank Water Heater.

With more than 400 reviews and an overall rating of 4.5 stars out of 5, this Bosch model comes in 3 different sizes, 2.5 gallons, 4 gallons, and 7 gallons, all of which vary in capabilities and price tag.

The 4-gallon point of use mini tank fits under your sink in order to provide you with hot water no matter where you need it. Whether you want hot water in your kitchen or your bathroom, this Bosch model can make it happen.

Thanks to its glass lined tank, the Bosch Tronic 3000 T 4-Gallon Electric Mini-Tank Water Heater has an exceptionally long service life and is extremely easy to maintain.

Additionally, this Bosch Tankless water heater can either be connected in-line with a large hot water source or through its 36 to 37-inch cord which plugs into a 120-volt outlet for independent installation.

Unlike more traditional models, it comes with a fast recovery rate which means that you’ll never have to wait hours to get hot water from your sink, shower, or bath.

This practical and effective water heater solution comes with an external dial so that you can control the temperature range of your water. Plus, it comes with a temperature and relief valve for additional safety.

The Bosch Tronic 3000 T 4-Gallon Electric Mini-Tank Water Heater comes in a simple white and grey design that can blend with virtually any exterior. It can be wall mounted or sit on a shelf. Either way, it comes with brackets included.

Measuring slightly more than the aforementioned EcoSmart model, this Bosch tankless water heater comes in at 13.75 inches high by 13.75 inches large and 13.5 inches in diameter. It weighs a mere 17.3 pounds.

Lastly, the Bosch Tronic 3000 T 4-Gallon Electric Mini-Tank Water Heater is easy to install. All you have to do is tap into the cold water line and install it directly where you’d like hot water.

This Bosch tankless water heater costs just over $161 and can be purchased from Amazon with an additional 2 or 4 years of protection for just over $7 and just under $14 respectively.

Best Gas Tankless Water Heater

Winner: Rinnai RUC98iN Ultra Series Natural Gas Tankless Water Heater

If you fancy your chances with a tankless water heater that uses gas, we can’t recommend the Rinnai RUC98iN Ultra Series Natural Gas Tankless Water Heater enough.

Finished in a beautiful metallic look, this Rinnai model is not only stylish but bound to suit any household it is installed in.

Not only this, it was created to save space in your home thanks to its compact design. You’ll benefit from the choice between a concentric or PVC venting options as well as a maximum BTU of 199,000.

Lastly, the Rinnai RUC98iN Ultra Series Natural Gas Tankless Water Heater offers ultra-low NOx emissions meaning that you’ll have a lower carbon footprint thus allowing you to have a less detrimental impact on the environment.

The low NOx emissions come as part of Rinnai’s new condensing technology which cannot even be compared to other models on the market today. And, if that’s not enough, the device meets both the California and Texas NOx emissions standards.

Whether you’re installing the Rinnai RUC98iN Ultra Series Natural Gas Tankless Water Heater in your home or your business, you’ll benefit from a 98 degrees Fahrenheit to 140-degree Fahrenheit residential temperature range.

When it comes to commercial temperatures, these will range from 98 degrees Fahrenheit to 185-degree Fahrenheit. Best of all, this model is compatible with the full line of Rinnai digital controllers, all of which are sold separately.

The Rinnai RUC98iN Ultra Series Natural Gas Tankless Water Heater has a 12-year limited warranty on the heat exchanger and a 5-year warranty on the various parts included. In addition to the above, the product comes with 1 year of labor for residential installations.

Weighing a mere 61.7 pounds and equipped with a ¾-inch gas and water connection, the Rinnai RUC98iN Ultra Series Natural Gas Tankless Water Heater is among the most stylish, easy to install, and effective tankless water heaters on the market today.

And, if all the above isn’t enough, it has received a 4 or 5-star rating more than 90% of the time. With a price tag of just over $1540 with free shipping straight to your doorstep, we believe this Rinnai model is by far the best available to you.

Runner Up: Takagi T-KJr2-IN-NG Indoor Tankless Water Heater

If the aforementioned Rinnai product is slightly out of your price range, then check out this Takagi model. While not quite as powerful, this gas tankless water heater is extremely easy to install and very effective in residential properties.

The Takagi T-KJr2-IN-NG Indoor Tankless Water Heater offers a BTU of anywhere between 19,500 and 140,000. Not only this, it has a 0.82 energy factor as well as a maximum flow rate of 6.6 GPM.

Because this Takagi model uses natural gas, it can be converted into a direct vent unit. That said, it can only be installed indoors and is not equipped to be put outdoors.

Not only this, to install this Takagi T-KJr2-IN-NG Indoor Tankless Water Heater you will require 4-inch category III stainless steel venting. Thanks to its inlet outlet thermistors, you’ll benefit from constant temperature monitoring.

Aside from being cost-efficient, this tankless water heater was designed with sustainability in mind, allowing you to cut down on your water bills while also having less of an impact on the environment.

Customers who bought and reviewed this tankless water heater are extremely happy with their purchase with many writing in to say that they love it. Many say that the installation process took only a couple of hours with the help of a professional.

In addition to all the above, reviewers say that hot water is provided throughout their entire homes, even those with properties of more than 2,000 square meters.

Perfect for light residential and radiant heating applications, the Takagi T-KJr2-IN-NG Indoor Tankless Water Heater is small compared to others of its kind, measuring only 20.3 inches high by 13.8 inches wide, and 6.7 inches in diameter. 

As the smallest tankless water heater that Takagi has designed, it is perfect for smaller homes or those of you who want to save space, the Takagi T-KJr2-IN-NG Indoor Tankless Water Heater has received 4-star ratings or more nearly 90% of the time.

And, if all the above isn’t enough for you, it is very reasonably priced at less than $490 per unit including free shipping straight to your doorstep.

Alternative: Rheem RTGH-95DVLN 9.5 GPM Indoor Direct Vent Tankless Natural Gas Water Heater

Our third best tankless water heater is the Rheem RTGH-95DVLN 9.5 GPM Indoor Direct Vent Tankless Natural Gas Water Heater.

While gas-powered, this tankless water heater comes with intelligent electronic controls specially designed to increase energy efficiency and safety. Plus, it is third party efficiency listed by AHRI.

The Rheem RTGH-95DVLN 9.5 GPM Indoor Direct Vent Tankless Natural Gas Water Heater meets and exceeds all rigorous industry standards for both quality and reliability and is designed to be 94% energy efficient thanks to its stainless steel condensing heat exchanger.

Customers who bought this product are particularly impressed with the fact that it is not only easy to install but works perfectly from the get-go.

The Rheem RTGH-95DVLN 9.5 GPM Indoor Direct Vent Tankless Natural Gas Water Heater has been designed to be quiet while being extremely quick to deliver hot water across your entire household.

While some customers say that it takes slightly longer to install compared to other models, it does come with clear step by step instructions from the manufacturer that are easy to follow.

Customers who purchased this Rheem model say that they have noticed a significant decrease in both their gas and water bills.

Others who reviewed this product say that they have not run out of hot water once since installing it, making it perfect for families or larger households with numerous tenants.

While slightly more expensive than its aforementioned counterparts with a price tag of just under $2000, the Rheem RTGH-95DVLN 9.5 GPM Indoor Direct Vent Tankless Natural Gas Water Heater has received amazing reviews nearly 85% of the time.

By purchasing this model from Amazon, you’ll not only benefit from free shipping straight to your doorstep, but also the chance to buy an additional 2 or 3 years of protection for just over $130 and $150 respectively.

Key Reason To Choose Your Tankless Water Heater Carefully

One of the key reasons you should choose your tankless water heater carefully is because of the price tag these products bring. While they are normally worth the money, choosing the wrong one could be a very expensive mistake.

In addition to this, you must choose a model that will stand the test of time. While traditional water heaters can last up to 18 years or so, these models have the ability to stick with you for more than 30 years if cleaned regularly and looked after.

You must also consider your space. Some of the best tankless water heaters come in a space saving design meaning that they can be installed virtually anywhere. Others can even be installed outdoors thus leaving you with more cupboard or wall space in your home.

Despite the more expensive setup fee, the best tankless water heaters are designed to lower your energy bills, and in some cases, your water bills.

Research suggests that tankless water heaters can be 24 to 34% more energy efficient in households that use 41 gallons of hot water or less on a daily basis. For households that use more hot water, they can be 8 to 14% more energy efficient.¹

Best of all, if you install a tankless water heater at each hot water outlet in your home, you’ll benefit from 27 to 50% more energy efficiency.

Lastly, find out what size your gas main has to be before opting for a tankless water heater. Modern models often require you to change certain pipes and various other parts of your home’s plumbing system.

You may also find that these types of water heaters require a higher voltage power supply if you choose an electric model, as well as a larger diameter exhaust system.

Features to Pay Attention to When Choosing a Tankless Water Heater

While you should be careful of all the above when choosing the best tankless water heater for your home, there are also specific features you should consider when making your final decision, some of these include:

Size

The size of your household and the number of people living it will hugely dictate the size of the water heater you choose. Of course, larger models tend to provide better and more consistent heat across your home.

Gallons Per Minute (GPM)

You must consider the GPM of your tankless water heater according to the amount of water you require on a daily basis. For example, if you have multiple bathrooms with more than one person at a time using the shower, bath, or sinks, you will need more gallons of hot water per minute.

Whatever your living situation, you should choose a tankless water heater that exceeds how much hot water you need on a daily basis.

Energy Saving

As mentioned above, tankless water heaters have the ability to save you a lot of money and of course, a lot of energy. This means that they can help you make a difference in the world by offering energy saving capabilities like no other heaters on the market at the moment.

Before making a purchase, check what energy saving capabilities your preferred model has. This will be clearly marked in the product’s description.

Fuel Type

When it comes to choosing your fuel type, you’ll typically have two choices, natural gas or propane. All gas units are available with Energy Star Ratings and natural gas tends to be a little cheaper than propane.

While gas models can be cheaper to run they do tend to be significantly more expensive to install than their electric counterparts because normally a gas line and exhaust vent must be installed.

Drain Valves

The drain valves are situated at the base of the water heater. As the name suggests, they’re used to drain valves. That said, they do come in a choice of plastic or brass. We suggest you look for brass drain valves because these are significantly more durable.

Digital Displays

Having a digital display is particularly helpful because it will allow you to monitor your water’s heat levels, thus enabling you to customize your settings according to the season and various other external factors.

Not only this, having a digital display means that you’ll likely be able to set a vacation mode which makes your water heater more energy efficient if you decide to go on holiday.

Warranty

Last but not least, you must always look at the warranty the manufacturer is willing to offer you. The best tankless water heaters tend to come with a lifetime warranty, however, other high-quality models offer anywhere from 5 to 12 years.

If your budget permits, we suggest you opt for a more expensive model with a longer warranty as these tend to come with larger burners that are also more energy efficient.

Our Verdict…

As you can see choosing the best tankless water heater is harder than it first seems. There are a lot of features to keep in mind, let alone knowing which type of heater to choose in the first place.

The five aforementioned products are some of the best tankless water heaters on the market today, all of which come with various price tags, features, and energy saving abilities.